Direct Shipping of Wine Set To Explode To Huge Levels
A recent analysis of the direct wine shipping market concludes that American wineries must prepare to increase their direct shipping capabilities in order to accommodate what will be an unanticipated yet staggering increase in the direct sales and shipments of wine. The coming increase in direct shipped wine will, according to the recent analysis, marginalize most if not all sales via the three tier system.
The source of the new analysis of the direct shipping market is Joseph Cryan of New Jersey. Though not an economist nor an industry analyst, Cryan does have a degree in Business Administration from Belmont Abby College as well as experience as the Undersheriff of Union County, New Jersey. Cryan credentials are further burnished based on his current position as a New Jersey Assemblyman.
According to Cryan's recent analysis of the direct wine shipping market published at NJ.com, New Jersey can expect upwards of 10.7 million cases of wine to be shipped into the state when direct shipping of wine is allowed in New Jersey with future legislation. This figures amounts to roughly 100% of all wine now sold at retail in New Jersey.
Cryan notes in his article at NJ.com that this unprecedented and extraordinary transformation of the New Jersey wine marketplace and in consumer buying habits will, according to him, impact the "60,000 retail jobs in our state; if we were to allow direct shipping, those New Jersey jobs could all but disappear."
Cryan's conclusion that direct shipping of wine will replace all local retail sales of wine in New Jersey is sure to have an impact on the ongoing debate in the Garden State as to whether or not to allow New Jersey residents to have wine shipped to them from both out-of-state as well as in-state wineries. It's possible, however, that Cryan's study of the New Jersey wine marketplace and the conclusion that direct shipping of wine will entirely replace brick and mortar sales as well as displace 60,000 New Jersey jobs, could blunt the effort to open the state to direct shipping of wine if the state feels that losing 60,000 might be bad for the state's economy. On an unrelated matter, Cryan is the primary opponent in the NJ assembly of allowing wine to be shipped directly to NJ residents.
Perhaps the most extraordinary aspect of the Cryan analysis of the wine shipping marketplace is the differences it highlights between New Jersey consumers and consumers in every other state. In no other state where direct shipment of wine is allowed has this channel of commerce come to account for more than 3-5% of all retail sales, let alone 100% of all retail sales as Cryan suggests will be replaced by direct shipments in his state.
Though Cryan does not explain why New Jersey consumers will completely forgo purchasing any wine at brick and mortar outlets once direct shipping is allowed, it is easy to speculate why such a divergence in purchasing habits will occur in New Jersey:
1. New Jersey consumers, unlike those in all other states, are extraordinarily lazy and, given the opportunity, will choose not to leave their homes if their sloth can be accommodated by new trends in the marketplace
2. Speculation by some that skin-devouring bacteria is spread to humans through contact with wine bottles that have sat on New Jersey retail shelves gives NJ consumers good reason to resort to direct wine shipments as the alternative to losing their epidermis.
3. The extraordinary good looks of the FedEx and UPS drivers in New Jersey has so captivated consumers that the result is a wholesale change in their consumption and buying patterns, including the desire to do whatever is possible to get these drivers to arrive at their front doors.
While it is true, as some critics of Cryan's conclusions have noted, that he does not offer any explanation for his startling forecast of the demise of brick and mortar wine sales and the unprecedented increase in direct wine shipping, it should be reiterated that Cryan does have a degree in business administration and was the Undersheriff of Union County, New Jersey. In addition, Cryan has significant experience dealing with distribution issues. He was the co-sponsor of a bill in NJ that would make it a "petty disorderly persons offense" to deliver a newspaper to a private citizen that requested the paper not be delivered.
No matter what the reasons for the coming transformation in wine sales, one thing is clear. If Mr. Cryan's conclusion concerning direct shipping are born out, we should see the three-tier system become completely irrelevant as consumers stop all purchasing of wine in brick and mortar stores as his analysis implies.
Anyone seeking more background on Joseph Cryan's analysis and conclusion that direct shipment of wine into New Jersey will result in the end of brick and mortar sales of wine in that state and the demise of 60,000 jobs in the wine retail sector of the state can call Assemblyman Cryan at: (908) 624-0880
I have always thought that the UPS guys here in DC are hot. That’s reason enough to order wine online 😉
Absolutely #1, 2 and 3 have to be driving the actions of all Garden Staters! ;-P
As long as the wholesalers keep funding him, he’ll keep spewing this BS. Yes, I do live in NJ, so this is nothing new.
You missed another key New Jersey difference. Apparently all New Jersey residents are able to plan days, weeks, or months ahead so they always have the just right bottle of wine on hand (or arriving by UPS) when they need it and would never need to stop on the way home from work or on the way to a party to pick something up.
There is something eerily similar about this guy and Craig Wolf. Anybody ever seen them in the same room before? Coincidence??
On behalf of tens of thousands of New Jersey wine consumers who are urging the NJ Legislature to lift the ban on direct shipping from wineries to NJ residences, we must respectfully disagree with the above commentary. Presently, 38 states allow for direct shipping from wineries to residents of their states. It’s quite clear that the liquor lobby and their legislative allies are determined never to allow NJ wine consumers the ability to have wine shipped from wineries to their homes, even if NJ is the only state remaining who has not changed its law.
The objections raised to direct shipping by the above commentary were thoroughly discussed in the other 38 states prior to enactment of their legislation to permit direct shipping, and completely rejected. We know the same old false arguments made by the liquor lobby in opposition to direct shipping, first, our state’s wine retailers and wholesalers will lose business and have to lay off employees, second, limited direct shipping will destroy the three tier system in the state for alcohol distribution, and third, direct shipping will provide minors with the ability to access alcohol and contribute to a rise in underage alcohol consumption. How ridiculous! No evidence in any of the 38 states exists to substantiate any of the objections raised by the above commentary, and that is why the state legislatures in those states dismissed the liquor lobby’s objections. Quite to the contrary, evidence does suggest that direct shipping has been very beneficial to those states, states are now collecting more sales taxes for direct shipping sales to residents, consumers have additional choice when it comes to wine purchases, and wineries are expanding their facilities and increasing their sales throughout the nation.
According to statistics collected from New York State taxation officials, direct shipping only represented less than one per cent of total wine sales for the entire state in 2007 and 2008. So, what are the NJ wine retailers and wholesalers complaining about? Does anyone really believe the liquor lobby’s claim that they will suffer a loss of business if direct shipping comes to NJ? Especially when you consider Senate President Sweeney’s legislation would only allow small wineries to ship in and out of NJ, most if not all of these wines are not sold and will never be sold by NJ wine retailers to consumers. The reason is small wineries are not nearly large enough to be represented by wine wholesalers, their wines are sold either at their wineries, or through their websites and shipped directly to customers in 38 states.
UnCorkNJ prefers Senate President Sweeney’s legislation, S-2782, not only because it would lift the state’s ban on direct shipping, but because its provisions regarding preserving retail wine outlets are better for NJ’s wine industry. We would urge the NJ Legislature to support Senate President Sweeney’s bill when it reconvenes this fall.
Tom…this couldn’t have anything to do with the court battle, that the US courts are giving lawmakers additional time to gather “evidence” one way or the way as regards S-2783…wanna bet that Mr. Cryan voted against the bill.
Another clear example of the extremes the WSWA and its political supporters will go to create a scare tactic (lose of 60,000 jobs) to further their cause!
BTW…when does Mr Cryan say that Santa Claus is going to show up?
We we got the ball rolling and knew these days were coming. It’s very fulfilling to know at least one of us is still in the business and enjoying the fruits of our labors through the 1990s when the industry wholesale moguls and Wine Institute were against us.
Truly astounding how the spirit of competition–the foundation of a democratic economy–continues to be stifled in these states for fear of an educated public with great and varied choices.
Agreed! It’ll be interesting to see what happens.